Chuong Duong was once a rival equal in strength with Coca-Cola and Pepsi, but has lost the competition with the two foreign giants. In 2017, Chuong Duong met with misfortune with the consumption decreasing by 6 million liters, revenue decreasing by VND100 million and a loss of VND3 billion. In the first quarter of 2018, it continued taking a loss of VND400 million.
A report from BMI, a market analysis firm, showed the high growth rate of 7%-12% of the Vietnam’s beverage market. However, in such a potential market, Chuong Duong’s revenue remains unchanged, about VND300-VND400 billion.
According to Vo Van Tho, general director of Chuong Duong Beverage, as the marketing budget is limited and there is no perfect branding strategy, sales cannot satisfy the profit expectations of distributors. Therefore, it is difficult to encourage distributors to expand the market and the products’ coverage.
Colusa-Miliket was once a strong instant noodle brand in Vietnam, well known as the ‘explorer’ in the food market. However, the brand which once led the domestic market has been lagging far behind because of the appearance of foreign rivals.
For many years, Colusa-Miliket has been satisfied with the profit of VND20 billion a year. The weak point of the brand, according to the company’s leadership, lies in marketing.
With 50 years of experience, Thong Nhat Match has also gone downhill. As electricity-run home appliances are present in households, the product is no longer popular. In the last 10 years, it can make a modest profit of VND2 billion a year only.
Dinh The Hien, a renowned economist, commented that the fame in the past cannot help Vietnamese brands live well in a market with stiff competition, if they cannot catch up with the customers’ taste and reform.
An analyst said Chuong Duong may see a brighter future as Sabeco, which is holding 62% of Chuong Duong’s capital, has been transferred to a Thai investor.
Previously, Chuong Duong needed approval from Sabeco, a state-owned enterprise, for its investment plans, and sometimes it missed opportunities because of delays. The foreign owner is believed to make decisions more quickly, which will help grab opportunities.
The structural reshuffling is also believed to help develop IFS, a food company well known with Wonderfarm tea brand.
After a period of taking losses, IFS recovered its business after Kirin, a Japanese F&B manufacturer, poured money into the company. In 2017, IFS made a profit of VND116 billion.